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Working Capital and its importance Working capital is like the heart beat of every business. It is very important for a company to have a balanced capital that is been working so as to have the business run even on an ice platter smoothly. It is actually a balance of the current assets that a company has which should always run above all current liabilities of any company. Then only the company will be able to make maximum profit.

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1. Strengthen the business: Working capital is needed to maintain the payments of liabilities of short term.

2. Easily obtain loans: Having appropriate working capital helps in gaining ratings in credits which is going to help a company to get loans from banks and other institutions running finance for easy and positive simple terms.

3. Smoothly run business: The well- being of a company depends on its working capital. So, to run a business properly it is importance to strike a balance on their working capital.

4. Increase goodwill: Having ample amount of working capital helps in gaining goodwill as the company will be able to pay up their liabilities easily.

5. Continuous supply of raw materials: Raw materials are the veins of company. It should always be there to serve the needs of any order but also not in excess that brings losses to company.

6. Handling crisis situation: There needs to be adequate amount of working capital to handle crisis situations as otherwise the company may run into getting bankrupt.

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